Mere recording of contrary statements do not establish claim of credit as bogus

Brief facts of the case:

The appellant (assessee) was engaged in the manufacture of Electrical Wiring Accessories falling under Chapter 85 of the Schedule to the Central Excise Tariff Act, 1985. They were availing CENVAT credit under Cenvat Credit Rules, 2004. During investigation, it was found that the appellant availed CENVAT credit amounting to Rs. 11,59,698/- on the basis of invoices issued by M/s. Annapurna Impex Pvt. Limited, Ludhiana  without receiving the inputs.  The Central Excise officers recorded the statements of the employee of the appellants, broker of M/s. Annapurna.

A show cause notice was issued proposing demand of duty of Rs. 11,59,698/- along with interest and to impose penalty on the ground that the appellant wrongly availed CENVAT credit on the strength of duty paying documents of M/s. Annapurna, without actual receipt of inputs. Aggrieved by the order of the adjudicating authority, assessee preferred an appeal before the Commissioner (Appeals) who upheld the order of adjudicating authority and rejected assessee’s appeal. Assessee now is in appeal before the CESTAT.

Contention of the Assessee:

The learned counsel for the assessee submitted that the appellant purchased the materials from M/s. Annapurna and directly sent to the Job Workers.  After processing of the raw materials, received from the input suppliers, the Job Workers delivered the processed materials to the appellant along with challans and bills of labour charges, which were used in the manufacture of final products and cleared on payment of duty.  He further submitted that the entire transaction was recorded in the CENVAT records and other statutory records. He submitted that the appellant produced all the documents before the adjudicating authority and no dispute was raised.

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